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Fraud Detection: Hernan Huwyler

This document summarizes a presentation on fraud detection given at the Fraud Risk Forum in January 2013 in Madrid, Spain. It discusses who typically detects fraud, including fraud risk management, internal audit, controls, and transaction reporting. It also outlines objectives to maximize correct predictions while maintaining incorrect predictions at an acceptable level. Finally, it discusses using internal and industry data, data analysis techniques, data cleansing algorithms, demos of fraud detection scenarios, and open discussions on related topics.

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Hari Purwadi
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75 views10 pages

Fraud Detection: Hernan Huwyler

This document summarizes a presentation on fraud detection given at the Fraud Risk Forum in January 2013 in Madrid, Spain. It discusses who typically detects fraud, including fraud risk management, internal audit, controls, and transaction reporting. It also outlines objectives to maximize correct predictions while maintaining incorrect predictions at an acceptable level. Finally, it discusses using internal and industry data, data analysis techniques, data cleansing algorithms, demos of fraud detection scenarios, and open discussions on related topics.

Uploaded by

Hari Purwadi
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PDF, TXT or read online on Scribd
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Fraud Detection

Hernan Huwyler
Madrid, Spain
Fraud Risk Forum
January 2013
Who detects fraud?

33%

18%
14% 13%
6%

• Fraud Risk
• Internal Audit Management
FRM • Suspicions
• Tipoff • By —chance” Transaction
Reporting
Controls

PwC's Global economic crime survey 2012


legitimate
record
legitimate
record

legitimate
record

fraudulent record
out of 9 system flags
Objective:
maximize correct predictions and maintain incorrect
predictions at an acceptable level
Data Analysis

Identify Analytics
Internal
Data

Apply Analytics to Data


Industry
Data

Leads Refine
Data Analysis 1

Branch A Branch C

Invigilation Branch B
HQ
Branch D

Business Branch A

BI
Branch C

Intiligence Branch B Branch D


Data Cleansing Algorithms

Poor initial data


conversion Factiva World Check
System
consolidations
World Compliance
Manual data entry

Interfaces and Customized data


baches cleansing rules
Demos
 Vendors / Employees - Conflicts of interests
 Vendor Activity – Sequentiality and fetching
 Treasury – Unrecorded Payments
 Treasury – Abnormalities and triangulations
 Several sources of data
 Combined attributes
 Normalization
Some techniques
 Statistical data modeling
 Data preprocessing
 Matching algorithms
 Peer group outliers and covariance
 Time-series analysis
Open discussions
 Supervised, unsupervised & hybrid techniques
 Quality data
 Design, implementation and evaluation
 Visualization tools
 E-business transactions
 Best practices

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